Bitcoin Futures Lose Their Appeal As Investors Anticipate Spot BTC ETF Approval
Bitcoin (BTC) price oscillated between $44,745 and $47,910 in less than 30 minutes on Jan. 9 as market participants tried to validate the U.S. Securities and Exchange Commission (SEC) post on the X social network that suggested all spot BTC ETFs were approved.Â
Bitcoinâs price eventually stabilized near $46,000 after SEC Chair Gary Gensler denied the news, but investors became increasingly suspicious that the situation could reduce the approval odds of the ETF decision by Jan. 10.
The impact of SECâs debacle on Bitcoinâs spot ETF approval odds
As explained by Jesse Berger, the author of âMagic Internet Moneyâ on X social network, the âunauthorizedâ post by the SEC could be used as an excuse to delay the spot Bitcoin ETF.
Somehow theyâll use the hack of @SECGov account as hack excuse to delay the ETF https://t.co/IXUOd3L403
â Jesse Berger (@jayberjay) January 9, 2024
One should note that the only ETF with a Jan. 10 deadline is the âARK Invest 21Shares,â while other issuers such as BlackRock, Bitwise, Fidelity, and VanEck only expect a final decision by March 15. This difference explains why senior Bloomberg ETF analysts are unable to estimate approval odds above 90%, given that the regulator could demand additional time.
Other factors cited by Bloombergâs James Seyffart include the spot ETF denial by the SEC, although it is unlikely in his view. The potential base for the negative outcome could include other reasons than the previously cited market manipulation risks or even some kind of direct order by Bidenâs administration.
Going one step further, hoeem, author of the âSeven c Newsletter,â explains that the event exposes how Bitcoinâs price can be âmanipulatedâ by a mere post on a social network, which could be used as an argument to deny the ETF, although the author does not have such a scenario as a base case.
:- SEC had no grounds to deny ETF.- SEC doesnât want to approve ETF.- SEC account gets âhackedâ. - Gary says tweet was âunauthorisedâ.- Bitcoins price has been âmanipulatedâ.- Garyâs main proponent against ETF isâŠ
â hoeem (@crypthoem) January 10, 2024
Hoeemâs hypothesis is much closer to reality than one imagines, at least from the price perspective, as Bitcoin struggles to sustain $45,000, down 4.3% from the previous dayâs $47,000 level. But, more importantly, Bitcoin futures premium has plunged to its lowest level in 3 weeks, indicating lower demand for leverage longs (buyers).
Bitcoin derivatives show reduced demand for bullish positions
Professional traders prefer monthly futures contracts due to the absence of a funding rate, which causes these instruments to trade 5%â10% higher relative to regular spot markets, justifying the longer settlement period.
Bitcoin annualized futures premium versus spot price. Source: Laevitas
Data reveals that the 2-month Bitcoin futures premium (basis rate) has declined to 12% on Jan. 10, matching its lowest level in three weeks. Despite remaining above the 10% threshold, the indicator reflects much lower demand for leverage longs (buyers) in comparison to the Jan. 2 levels above 20%. Thatâs certainly not what one should expect if approval odds for the spot Bitcoin ETF stand at 80%.
The Bitcoin futures premium could have been impacted by the increased demand to hedge Grayscale GBTC fund exposure. The shares have been trading at a discount relative to the Bitcoin equivalent holdings since February 2021, but that would change if Grayscaleâs spot ETF fund conversion gets approved by the SEC. GBTC holders would finally be able to redeem their shares at face value, so the arbitrage opportunity exists in buying the fund shares and selling the equivalent in BTC futures to hedge the exposure.
Related: US senators seek Gary Genslerâs report on X breach, deadline Monday
Traders should also analyze options markets to understand whether the recent price correction has caused investors to become less optimistic. The 25% delta skew is a telling sign when arbitrage desks and market makers overcharge for upside or downside protection. In short, if traders anticipate a Bitcoin price drop, the skew metric will rise above 7%, and phases of excitement tend to have a negative 7% skew.
As displayed above, Bitcoin options delta 25% skew remained within the neutral range, although it moved closer to the 7% threshold for bearish markets. In essence, both BTC futures and options signal that any excessive optimism has been wiped out after the unexpected volatility on Jan. 9.
It would be far-fetched to infer that market approval odds have gone below 80% given Bitcoin derivatives markets, but it is certainly less bullish in comparison to the previous week.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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Good to Scalp short at Current Price with Stoploss 1916$
Many market participants are knowledgeable of the fact that most popular markets close their doors on Friday afternoon Eastern Time in the US. Investors pack up their things for the weekend, and charts around the world freeze as if prices remain at that level until the next time they are able to be traded. However, that frozen position is a fallacy; it isnât real. Prices are still moving to and fro based on the happenings of that particular weekend, and can move drastically from where they were on Friday until the time they are visible again after the weekend.
This can create âgapsâ in the market that can actually run beyond your intended stop loss or profit target. For the latter, it would be a good thing, for the former â not so much. There is a possibility you could take a larger loss than you intended because a stop loss is executed at the best available price after the stop is triggered; which could be much worse than you planned.
While gaps arenât necessarily common, they do occur, and can catch you off guard. As in the illustration below, the gaps can be extremely large and could jump right over a stop if it was placed somewhere within that gap. To avoid them, simply exit your trade before the weekend hits, and perhaps even look to exploit them by using a gap-trading technique.
1: In trading you analyse the market and Take trade at proper support or proper breakout while in gambling you Just Jump into a pumping coin like a running train either you fall or sit. (Huge risk)
2: In trading You will always wait for a perfect moment to Take entry While In Gambling you will try to short a pumping coin without knowing anything. It's like catching a falling knife if you failed to catch it perfectly it will cut your hands.
3: How to Find a good proper Trader to follow?
Always Look for the one who share charts analysis for you ( Having Name of channel on chart at the Top as you can see my All charts have #ESTR_TECHNICAL written at the Top left corner. because 99% Just copy paste other's
While the gambling channel will always delete stoploss trades. Because for them it's impossible to show 200%+ Stoplosses.
Just leave those who do this.
They are playing with your money.
Cheers đ» I hope all of you understand how to find a legit trader â
I am providing you daily 2-5 signals you should have to take all the trades. I always mentioned you about take profit and stop loss. Trail stop loss is necessary to make profit in crypto world. I always mentioned you to use 2,5or 10% of your wallet not use your full margin on a single trade because it will increase your risk .we always take trade about 1:2 to 1:3 means if our sl is 1% then our profit will be 2% or 3% . I am providing daily 2-5 signals with a risk reward ration 1:3 if our one trade hit our stop loss then we are in profit not in loss because when we get profit then it is three times greater then loss so not worried if one signal hit our stop lossÂ
After 1st or 2nd target đŻ done â you should have to put stop loss on 1st target so that if trade gone wrong our sl hit but we booked our small profit
1) If you have $100, do not use 50% margin in trading signals. Use only $10 in each transaction âïž
2) if you have $50, use $5 in each trade âïž
3) if you have $200, always use $20 $15 in each transaction
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7) When your trade gets to 50%, so you do, put the stoploss on the entry zone and hold it. If your trade reaches 100%, always put stoploss on 50% profit âïž
If your only losing trade does not open another position đ VERY IMPORTANT
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Stay strong, stay informed, and stay resilient. Keep believing in the power of blockchain and the potential of decentralized finance. These moments of uncertainty will pass, and when they do, we'll find ourselves standing stronger and more united than ever. We're in this together, navigating through the waves of the crypto market.
Keep your spirits high, crypto investors. Let's face this challenge together.
Today, I stand before you not just as a voice in the crypto community, but as an unwavering believer in the untapped potential of Bitcoin. When we first embarked on this journey, I saw a vision that many dismissed as pure fantasy. A target price of $110,000 for a single Bitcoin. A target that seemed to exist only in the realm of the impossible.
Yet here we are today, standing at the precipice of a new era. Bitcoin is currently valued at $27,000. A value that many said it would never reach. But we didn't just reach it, we surpassed it. We proved the skeptics wrong, and we'll do it again.
So, to those of you who have placed your trust in my analysis, I say to you: Hold fast. This is not the end of our journey, but the beginning. This is not the peak of our climb, but the base of our mountain.
If there is one thing that my time in the crypto-sphere has taught me, it is that faith and patience are rewarded. So, I implore you: hold your positions. The storm may be rough, but the sunrise that follows is worth the ride.
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Hold fast, hold strong, and believe in the future. The bull is not just running - it's charging, and the $110,000 horizon is well within our sights. Thank you for your trust, your faith, and your audacity to believe in the impossible. Together, we'll redefine the boundaries of possibility."
This is our shared journey, and I'm honored to be on this path with all of you. Let's continue moving forward, for the future of Bitcoin, and the prosperity that it promises, is closer than ever. Thank you.
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